Essential Home Loan Questions Explained

1. What First Home Buyer Grants or Schemes Can I Access?

Australia offers multiple programs (eligibility varies by state/territory):

• First Home Guarantee (FHG) – Buy with just a 5% deposit (no LMI).
• Help to Buy – Shared equity scheme (govt covers up to 40% of purchase price).
• Regional First Home Buyer Support – 5% deposit for regional properties.
• Stamp Duty Concessions – Some states waive/reduce fees for first homes under $800k.

2. What Interest Rate Can I Get, and How Much Can I Borrow?

Your interest rate and borrowing power are influenced by:

• RBA’s cash rate (the baseline for all lender rates)
• Your Loan-to-Value Ratio (LVR) – The lower your deposit, the higher the perceived risk (and possibly higher rates). Aim for ≤80% LVR to avoid Lenders Mortgage Insurance (LMI).
• Credit score – A strong history (on-time bills, no defaults) helps secure better rates.
• Serviceability – Lenders stress-test your income against higher rates (typically +3% buffer). Use our borrowing calculator for estimates, but contact us for a precise assessment—every lender calculates differently!

3. How Do I Check My Home Equity?

Equity = (Current Property Value) – (Remaining Mortgage).
To estimate:

1. Get a free property valuation (we can arrange this).
2. Check your mortgage balance (log into your loan account).
3. Use our equity calculator.
   Example: If your home’s worth $800k\; andyouowe$500k, you have $300k equity (possibly usable for upgrades/investments).

4. Are There Cashback Deals for Refinancing or First-Time Buyers?

Yes! Many lenders offer:

• Refinance rebates ($1,000–$5,000 cashback for switching loans).
• First home buyer incentives (e.g., $2k–$10k for specific suburbs).

5. Can I Get a Loan After a Part IX Debt Agreement?

Yes, but options are limited:

• Wait 12+ months post-discharge for more choices.
• Specialist lenders may approve at higher rates (8–10%).
• Focus on rebuilding credit (e.g., small car loans paid on time).

6. I Just Started a New Job—Can I Get a Loan?

Lenders prefer 3–6 months in your current role, but exceptions exist if you:

• Stay in the same industry (e.g., nurse switching hospitals).
• Have a stable career history (no frequent job-hopping).
• Are a high-income earner (e.g., doctor, lawyer).
  Self-employed? Need 2+ years of tax returns.

7. Should I Roll Personal/Car Loans into My Mortgage?

Pros:

• Lower interest rate (home loans ≈ 6%, personal loans ≈ 10–15%).
• One monthly payment.
  Cons:
• Extends debt term (paying interest longer).
• Risks your home if you default.
  Better option: Refinance to a lower-rate personal loan or negotiate with creditors.

8. Can Temporary Visa Holders Buy Property?

Yes, but with extra steps:

• FIRB approval required (fees apply).
• Higher stamp duty surcharges (e.g., 8% in NSW).
• Limited lenders (some require 20–30% deposits).
  Good news: No restrictions if buying brand-new properties.

9. Do Foreign Investors Get Higher Rates?

Unfortunately, yes. Non-residents often face:

• Interest rates 0.5–2% higher than locals.
• Stricter loan terms (e.g., 50% LVR max).
• Additional state taxes (e.g., VIC’s 8% absentee owner surcharge).

10. Fixed vs. Variable: Which Is Better Now

Fixed Rate:

• Good if you value certainty (budget stability).
• Current avg: ~6.5% for 3 years.

Variable:

• Flexibility (extra repayments, offset accounts).
• Potential savings if rates drop (economists predict cuts in late 2024).
  Hybrid option: Split your loan (50% fixed, 50% variable).